Luxury Brand

Topics: LVMH, Branding, Luxury good Pages: 7 (1996 words) Published: April 14, 2013
It is universal truth that luxury brand industry is still booming even during financial crisis because today's people have the right mind-set that luxury products are purposeful and well thought out. In other words, they want to show off their wealth and personal status.

Main Forces The Macroenvironment Facing The Luxury Brand Industry

Analysing the macroenvironment facing the luxury brand industry, there are demographic forces, economic forces, cultural forces and technological forces.

1) Demographic Forces

Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics “Principles of marketing” (Kotler, Adam, Denize and Armstrong, 2008, p.89).


It is learnt from the case study that generation Y is so important to luxury brands. The main reason is that most of them are single people with single incomes. So, their spending power is really higher, compared to generation X. Thus, recession also does not affect them much. As a result, generation Y can be considered as a confident segment that prefers to spend over saving. Moreover, they are brand loyal and feel personally connected to their choices. And, they get the information from the social web like Facebook and Twitter as well as from the fashion-forward television series Gossip Girl (Caines, 2009). In addition, they have been attracted by those Hollywood stars like Emma Watson, Rachael Taylor, Kristen Stewart using Burberry, Louis Vuitton, Chanel, etc. (Case Study). Therefore, it is understood that the international luxury market is made up of young affluent citizens of the world.


According to the “Luxury Fashion Branding” (Okonkwo, 2007, p.73), a quarter of the world who are using luxury goods are Japanese. And, most of them are over fifty years old who are the centre of the Japan’s wealth. They are more willing to buy the luxury brands without hesitating. Moreover, Asians are very enthusiastic to sample for new things and prefer to buy the best quality because they acknowledge Western brands as high quality. After all, the most important reason to have the designer brands or luxury brands for them is for their personal status.

2) Economic Forces

They consist of factors that affect consumers buying power and spending patterns “Principles of marketing” (Kotler, Adam, Denize and Armstrong, 2008, p.89). In fact, both of the power depends mainly on the personal income and country economy. Based on (Yann Truong, 2010, p666), Yann Truong said that lower and middle class consumers are more interested in luxury brands due to the global growth of disposable income. Indeed, the buying power heavily depends on the income. The consumer income reflects their lifestyle and living standard. It means that the more they earn, the more they spend on luxury products. That's why, it is studied that the marketers are observing the changes of the economic trend every second in order to grab the opportunities.

3) Cultural Forces

It consists of society's basic values, perceptions, preferences and behaviours “Principles of marketing” (Kotler, Adam, Denize and Armstrong, 2008, p.89).

“Brand Equity of Luxury Fashion Brands Among Chinese and U.S. Young Female Consumers” (Jung and Shen, 2011, p.55) explained that Confucian philosophy is deeply rooted in China and Chinese people are too obedience to theirs superiors for social harmony. Therefore, China consumers have a very strong respect for authority compared to the United States consumers. As a result, Chinese are more likely to be influenced by the celebrities and opinion leaders. Furthermore, their imitation of celebrities’ lifestyles is quite high, and their purchasing decisions are strongly influenced by the celebrities. Thus, business people are using the celebrities to advertise their brands in the market.

4) Technological Forces

They affect new technologies, creating new product and market...
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